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Small is Beautiful: Economics as if People Mattered | Summer Reading Series
Excerpt from Chapter Five: A Question of Size

I was brought up on the theory of the “economies of scale” — that with industries and firms, just as with nations, there is an irresistible trend, dictated by modern technology, for units to become ever bigger.

Even today, we are generally told that gigantic organizations are inescapably necessary; but when we look closely we can notice that as soon as great size has been created there is often a strenuous attempt to attain smallness within bigness. The great achievement of Mr. Sloan of General Motors was to structure this gigantic firm in such a manner that it became, in fact, a federation of fairly reasonably sized firms.

In the affairs of men, there always appears to be a need for at least two things simultaneously, which, on the face of it, seem to be incompatible and to exclude one another. We always need both freedom and order. We need the freedom of lots and lots of small, autonomous units, and, at the same time, the orderliness of large-scale, possibly global, unity and coordination.

For constructive work, the principal task is always the restoration of some kind of balance. Today, we suffer from an almost universal idolatry of giantism. It is possibly one of the causes and certainly one of the effects of modern technology, particularly in matters of transport and communications. 

An entirely new system of thought is needed, a system based on attention to people, and not primarily attention to goods — the goods will look after themselves! It could be summed up in the phrase, “production by the masses, rather than mass production.”

What is the meaning of democracy, freedom, human dignity, standard of living, self-realization, fulfillment? Is it a matter of goods, or of people? Of course it is a matter of people. But people can be themselves only in small comprehensible groups. 

We must learn to think in terms of an articulated structure that can cope with a multiplicity of small-scale units. If economic thinking cannot grasp this it is useless. If it cannot get beyond its vast abstractions and make contact with the human realities of poverty, frustration, alienation, despair, breakdown, crime, escapism, stress, congestion, ugliness, and spiritual death, then let us scrap economics and start afresh.

Are there not indeed enough “signs of the times” to indicate that a new start is needed?

Summer Reading Series
Small is Beautiful: Economics as if People Mattered
E. F. Schumacher
25th Anniversary Edition — With Commentaries
Hartley and Marks Publishers, 2000

Today’s Readings
Joshua 8 (Listen – 5:55)
Psalm 139 (Listen – 2:26)

Summer Reading Series
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